Simplified Not Simplistic Strategy

Let’s agree on one thing. Business is complicated. It doesn’t matter what business or sector your organization is in – there are lots of things going on inside and out that have to come together in just the right way for your organization and people to produce great results.

However, business complexity shouldn’t cause organizations and leaders to opt for a simplistic approach to strategy. What it does call for is strategy simplification. Let’s look at the difference.

Many organizations respond to the complexity challenge by either summarizing the ultimate objectives of the organization into three or four key results areas or themes (and calling that their strategy) OR including the kitchen sink in their strategic plan. If you’ve been around organizations long enough I’m sure that you’ve seen both of these scenarios in action! And even though these appear to be different problems, they have something in common – they both display a simplistic approach to strategy. One does it by providing a slim list of high level strategic results areas that’s not actionable while the other does it by providing so much information that it completely obscures the business imperatives.

In my experience, the common belief underlying both of these approaches to strategy is that employees can’t make sense of detailed information and must be shielded from the complexity of the business in their daily work and decisions. The first tactic does this by effectively limiting strategy information (which doesn’t help employees prioritize their work and decisions – something employees are increasingly pleading for these days) while the other tries to provide a fully scripted set of activities for employees to implement (an approach that grossly under-utilizes the talents of a workforce and frequently misdirects its work efforts).

The truth is that, as an approach to moving an organization, and strategy, forward, simplistic strategy is riskier than business leaders may have imagined – here’s a few of the reasons why:

  • Without insight into the drivers of the desired business results, employees make their own calls about what their daily priorities should be (don’t forget – employees are smart people). It’s almost guaranteed that these decisions will result in well-intentioned mis-alignments that cause inefficiencies, mis-spending, and conflict across the organization, all of which make results achievement much harder than it has to be’
  • An over-orchestrated strategy that includes prescriptive employee action and task assignments, more management controls, and restricted decision authorities squelches employee engagement and morale, and hobbles an organization’s ability to respond pro-actively and organically to change.

However, the biggest downside of taking the simplistic approach to strategy is that leadership is perceived as not being in touch with the realities of the business and employee confidence in leadership is eroded.

In contrast, a simplified strategy acknowledges that business is complicated while seeking to find the line of “best fit” through the complexity. It goes beyond defining the key results that must be delivered to be successful to also identify the SHORT LIST of objectives that must be in place (and executed well) to drive the desired business results. Rather than treating employees as unsophisticated thinkers, the simplified approach engages employees from all across the organization in identifying and continually refining the drivers of success (leveraging learning, knowledge sharing, and collaborative problem solving). And, most importantly, an effective simplified strategy provides employees with the information they need to make the work priorities, decisions, and trade-offs required every day much clearer.

Many business leaders shy away from the simplified approach to strategy due to the investment, work, and engagement effort it requires. However, that’s only part of the equation – it’s better to look at the total ROI (financial and non-financial/human impact) of any approach to strategy. In an era of complexity and flux, the ROI associated with the simplified approach to strategy continues to outperform the ROI of simplistic strategy.

I don’t expect it to change anytime soon…..

1 Comment

  1. Mihai Ionescu
    Apr 13, 2016

    The key word on this topic is: the model. That’s what we use for creating a simplified managing system for a complex business and organization.

    The model is a compromise between the manageable simplicity and the complexity of the managed processes.

    If we simplify the model too much it becomes an artificial construct, with too few or too abstract relationships with the reality and nobody trusts it anymore.

    If we make it too complex, it becomes difficult to manage and communicate and people don’t use it, mainly because it represents a too heavy overweight on their daily job routines.

    In the example of the K-N Balanced Scorecard Framework, there is an excellent way to make the BSC model both simple (to manage/use) and, at the same time, as complex as needed.

    Alignment. If you put together all the Strategy Maps and the Scorecards and the Strategic Initiatives portfolio, you usually get a very complex construct. However, nobody works with all of it. The executive team works with the top organization layer, the departments work with that part of the model that represents their contribution to the top organizational layer, as well as to their internal client peers and, further on, each employee who gets an Individual Scorecard (not all of them need to get one) is only concerned with a few couple of Objectives and KPIs that it contains and with one or more Initiatives to which he/she is either a project team member or a realization contributor.

    So we can have management systems that are both simple and complex, at the same time. Behind the, however, there is a clockwork mechanism which isn’t simple at all and which cannot be built based on casual knowledge.